A Firm Starts Its Year with a Positive Net Working

question 24

Multiple Choice

A firm starts its year with a positive net working capital. During the year,the firm acquires more short-term debt than it does short-term assets. This means that:

• A) the ending net working capital will be negative.
• B) both accounts receivable and inventory decreased during the year.
• C) the beginning current assets were less than the beginning current liabilities.
• D) accounts payable increased and inventory decreased during the year.
• E) the ending net working capital can be positive, negative, or equal to zero.

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Definitions:

Globalization

The process of increasing interdependence and connectivity between countries through trade, investment, technology, and cultural exchange.

Interdependence

A mutual reliance between two or more groups, organisms, or objects, often for survival or benefit.

Mutual Awareness

The recognition and understanding individuals have of each other's presence, feelings, thoughts, and intentions in a social context.

Core Capitalist Countries

Nations that dominate global economic systems, characterized by high levels of industrialization, technological advancement, and significant influence on global trade and markets.